Bush Picks CSX Corp. Chief for Treasury By Mike Allen Washington Post Staff Writer Monday, December 9, 2002; 11:24 AM President Bush announced today that he has chosen CSX Corp. Chairman John W. Snow to be the new treasury secretary. In the quick announcement this morning, Bush said Snow, a Transportation Department official in the Ford administration and a frequent visitor to Capitol Hill ever since, was well suited for the job because he "knows first hand how the economy works." Snow responded to Bush, "I look forward to joining your economic team to advance a pro-growth, pro-jobs agenda." Snow is chairman, president and chief executive of CSX, a freight and transportation conglomerate that is based in Richmond. CSX is a major coal hauler and operates the largest rail freight network in the eastern United States. Snow is to replace Treasury Secretary Paul H. O'Neill, who was fired by Bush last Friday along with chief economic adviser Lawrence B. Lindsey. The administration is attempting an urgent midterm correction to boost the flagging economy as the 2004 campaign season begins. Administration officials said Snow, 63, was picked partly for a skill that they saw lacking in O'Neill: an ability to communicate Bush's policy clearly on television and Capitol Hill. The officials also cited Snow's familiarity with Washington policymakers and his record in business beyond New York, which the White House refers to as "Main Street experience." Snow, a solid Republican with ties to moderate Democrats, is known as a glass-smooth salesman who doesn't need staff members to provide him details during interviews and meetings. He was a tireless champion of deregulation when he was deputy undersecretary at the Transportation Department under President Gerald R. Ford. Vice President Cheney, who led the selection process for O'Neill's successor, was White House chief of staff under Ford. Snow is also close to Federal Reserve chairman Alan Greenspan and his predecessor, Paul A. Volcker, associates said. Snow is a former chairman of the Business Roundtable, an influential association of chief executives of major companies. Sources familiar with the selection process said Snow's Capitol Hill contacts from his years of work with the roundtable and other public policy groups were considered a major asset. Snow was known as a skilled schmoozer of lawmakers, the sources said. Snow also has been active in the Business Council, another voice of big business that has clout on Capitol Hill, and on the National Coal Council. He is a director of United States Steel Corp., Verizon and Johnson & Johnson. In an example of the performances that endeared Snow to the administration, Snow appeared on CNNfn in July to praise the speech Bush had just given on Wall Street about corporate responsibility. Snow said he was eager to "respond to that call-to-arms that the president gave us to return to the ethical moorings of capitalism." "The shareholders own the companies," Snow said. "Management are just the hired hands." Administration documents released in response to lawsuits showed that Snow was among the executives granted meetings with Energy Secretary Spencer Abraham while the administration was deliberating about its energy policy. Snow faces Senate confirmation, and sources said he can expect extensive questioning about any government subsidies to CSX. Snow is joining the administration at a time when Bush is being scrutinized by Wall Street and criticized by Democrats for doing too little to preserve the booming economy the nation enjoyed under President Bill Clinton. A recession had begun before Clinton left office, and the White House contends that the downturn was short and shallow. Last Friday, the government reported that the unemployment rate in November matched an eight-year high. Snow's first big job will be to build support among executives, lawmakers and voters for a package of tax cuts that Bush is to propose next month. White House officials said the plan's parameters are fairly clearly set, but Bush's announcement of the plan was delayed from this week to allow Snow and Lindsey's successor, former Goldman Sachs Group Inc. chairman Friedman, to have input. An administration official said Snow is certain to enjoy a honeymoon with Wall Street and Capitol Hill, but Democrats have already signaled that their main attack on Bush's replacement team will be that it is made up of new faces pushing the same policy. "They'll just call it more tax cuts for the rich," the official said. Snow, a native of Toledo, is the son of a solo-practice lawyer and a longtime schoolteacher. He worked as a lawyer and professor before joining the Transportation Department in 1972 as assistant general counsel. He briefly returned to academia before going back to the Transportation Department, where he was an assistant secretary and deputy undersecretary before serving as administrator of the National Highway Traffic Safety Administration from 1976 to 1977. Snow led CSX, formed in 1980, as it prospered under the new deregulation law. Snow, who made the deal for CSX to take over Conrail, joined the company as vice president of governmental affairs in 1977, when it was Chessie System Inc. He received a swift series of promotions and became president in 1988, chief executive in 1989 and chairman in 1991. In October, Snow signed a contract with CSX that extended his employment through 2004, with a consulting period of two years beyond that. His annual base salary was to be at least $1,250,000, with $500,000 for the first year of consulting and $250,000 for the second. He also was eligible for annual bonuses of as much as 120 percent of his salary. He receives stock options and other benefits, and he is entitled to at least five weeks of vacation each year. The contract also granted him country-club membership, home security, physicals and accounting services for the rest of his life. He is entitled to unlimited use of company aircraft during his employment, with "reasonable and occasional use" for the rest of his life, the contract states. Cabinet secretaries make $157,000 a year. Snow has been a generous donor to Republicans over the years, including giving $1,000 to the George W. Bush campaign on April 6, 2000. The one line in all his data that may give heartburn to some in the West Wing is the $1,000 he donated to Sen. John McCain (R-Ariz.) in 1997, well before McCain incurred the wrath of Bush's camp by challenging him for the Republican presidential nomination. Presidents of both parties have tapped Snow. In 1988, President George H.W. Bush named Snow to his White House Conference for a Drug Free America when Snow was working in Jacksonville, Fla., as president and chief executive of CSX Transportation Group. A month before the current president took office, Clinton saluted Snow during a ceremony honoring new members of the Federal Aviation Administration's new Air Traffic Organization, which was supposed to make the FAA more efficient. In 1995, House Speaker Newt Gingrich (R-Ga.) and Senate Majority Leader Robert J. Dole (R-Kan.) named Snow to a GOP tax panel aimed at developing a simpler tax system. Later that year, Snow was part of a bipartisan group of business leaders who signed an open letter in The Washington Post calling on Clinton to offer a credible plan or a balanced budget. The budget became balanced in 1997, then returned to deficit after the terrorist attacks of Sept. 11, 2001. Bush attributes that largely to the national emergency, while Democrats blame his tax cut. The White House has kept the selection shrouded in strict secrecy, and Bush's aides said he loves to spring surprises. So officials said Bush was showing his sense of humor yesterday when he and his senior adviser, Karl C. Rove, made highly public appearances with two finalists at a time when all of official Washington was buzzing about rumored candidates. Returning from Camp David, Bush strolled off the Marine One helicopter with his parents and Commerce Secretary Donald L. Evans, his best friend and constant confidant. At about the same time, Rove was having lunch at the Four Seasons in Georgetown with Gerald R. Parsky, a Silicon Valley venture capitalist who was chairman of Bush's California campaign. A source described Evans and Parsky as being among roughly five finalists. Sources said the appearances were designed to show that although the two men were not chosen, their stock remains high in the West Wing. O'Neill and Lindsey were told Thursday that they were expected to resign. They were told they could inform their staffs on Monday, and then Bush would thank them and announce their departures. But a furious O'Neill sped up the process by making his resignation letter public Friday morning. Lindsey accepted the news placidly and showed up for the senior staff meeting at 7:30 a.m. Friday as if nothing had happened. In an interview yesterday, he said he had no regrets and will continue cheerfully in his position until Friedman is ready to take over. "We're parting on very good terms," Lindsey said. Bush has not met with Lindsey or O'Neill since they were ousted, but Lindsey said Bush sent him a warm typewritten letter with a handwritten addition. "He was very gracious," Lindsey said. "He thanked me, told me I did a good job, and thanked my wife for all she put up with." Lindsey said that after Christmas, he's taking his three young children to Florida. "It's almost like the commercial," he said with a jolly laugh. "I lost the White House, but I'm going to Disney World."
I rarely agree with Safire, but I always try to read him. Some interesting things here... ____________________ New Economic Policy By WILLIAM SAFIRE WASHINGTON — To combat the creeping uncertainty that underlies the current beat of the doldrums, here's what President Bush should do: 1. Get off the defensive. "Things are not as bad as they look" is not exactly a grabber. Sure, productivity is up sharply and home equity is a bedrock bonanza, but the sense is spreading that the droopy way things look is the way they are. Forget blaming the Clinton bubble; focus on fixes. 2. Put one executive in charge. The apparent choice for inside man, Stephen Friedman — a former Goldman Sachs dealmaker and Columbia U. wrestling champ — is said to be an adept manager. But he should defer to the Treasury secretary as spokesman and leader, accountable to Congress as well as to Sunday-morning Savanarolas. 3. Launch the War on Uncertainty. You've already promised to make the tentative future tax cuts permanent; with control of Congress, you can now trump yourself and move many of them up earlier. Get rid of that weird sunsetting of the death-tax reduction that has rich grandpas worried about getting murdered by beneficiaries in 2011. Balance that with action to — 4. Make the retroactive extension of unemployment insurance payments the first item you request from the new Congress next month. The much-needed money will be spent right away on post-holiday sales, provide a morale boost and will show you care about the 6 percent out of work. 5. Assign your new Treasury chief the job of explaining the need for ending double taxation of dividends. Not only would middle-class investors get a better return on their investment, but this would profoundly change recent go-go corporate behavior. Today's option-driven executives use company cash to shrink outstanding stock or to buy other companies; but with individuals' dividends untaxed, corporations would have a new incentive to pay out more profits to their real owners. This would devolve more power to stockholders; they, rather than directors, should decide how to spend their company's profits, much as other tax reduction lets taxpayers, rather than bureaucrats, decide. Even class warriors would have a tough time opposing such investor populism. 6. Give losers a break. Double the amount of capital losses that taxpayers — most of whom have had a rough couple of years in the market — can deduct from income taxes. No need to reduce the tax on capital gains; the winners can afford it. 7. Give savers a break. Accompany the tax-freeing of dividends with other incentives to save, such as increasing the amount workers can contribute to an IRA and upping the caps on 401(k) plans. 8. Ignore 10-year projections of anything. The latest foolishness is the General Accounting Office's projection of a trillion-dollar-a-year budget deficit a decade hence, give or take a hundred billion; a couple of years ago, scientific-sounding estimates had us splashing about in a surplus of a trillion or more. Circumstances change; make no projections beyond the first fiscal year of your second term. 9. Speaking of politics, don't let Democrats push you into cutting the payroll tax, wellspring of the Social Security system. Instead, propose raising the standard deduction for individuals to relieve those of the working poor still on the tax rolls. Bolster Social Security with your long-promised proposal to enable workers to invest a small portion of their equity in a selection of mutual funds. Space on today's tablet is limited to nine commandments. Wrap together a package something like this, involve a few committee chairmen, bundle it with a promise to veto excessive spending in light of the war, and launch it with confidence bordering on certitude in your State of the Union address. Then dispatch your new economic team to sell it to Congress and the nation. One caveat: do not call it your "New Economic Policy." Treasury Secretary John Connally wanted to affix that label to the Nixon administration's midcourse correction, but was stopped at the last moment by a guy in the Library of Congress who remembered that was the name Lenin selected for his Communist turnaround in the 1920's. Tell your new team to come up with a name without baggage.
